Walter Energy board has proxy challenge

Wednesday

Mar 6, 2013 at 12:01 AM

A fight for control of a company that is one of West Alabama's largest employers is under way. A British hedge fund that controls less than 1 percent of the stock in Walter Energy, parent company of Jim Walter Resources, is challenging the election of Walter Energy's board of the directors at next month's annual meeting.

By Patrick RupinskiBusiness Editor

A fight for control of a company that is one of West Alabama's largest employers is under way.A British hedge fund that controls less than 1 percent of the stock in Walter Energy, parent company of Jim Walter Resources, is challenging the election of Walter Energy's board of the directors at next month's annual meeting.Audley Capital Advisors has filed a notice that it will seek five seats on Walter Energy's 10-member board of directors. Walter Energy, which operates coal mines and related businesses, elects its entire board yearly. This year's election will be April 25 at the company's annual meeting at its headquarters in Hoover. Walter Energy in its proxy statement has asked its shareholders to back its slate of 10 director nominees. Stockholders can vote online or by mail before the annual meeting or vote in person at the meeting. Each share of stock counts as one vote. Typically, most votes are cast before the annual meeting with the results announced at the meeting.In its proxy statement to shareholders, Walter Energy's board has asked shareholders to ignore Audley Capital's solicitation for votes.Audley Capital is expected to send its own solicitation of votes to shareholders. It has said Walter Energy has fallen short of its earnings target, relies heavily on debt financing and is poorly managed.Walter Energy in its statements to stockholders said it is “committed to creating value for all shareholders through the successful execution of the company's strategy.”Walter Energy is a major producer of metallurgical coal, which is used in steelmaking. It has about 4,100 employees in the United States, Canada and the United Kingdom. Alabama accounts for the largest share of its work force, most of which is in West Alabama.Audley Capital and people affiliated with it control about 200,000 shares of Walter Energy stock. There are more than 62 million shares of Walter Energy outstanding.In its annual report, Walter Energy said 2012 was a difficult year for the coal industry with a weak market for metallurgical coal because of China's slowing economy and Europe's economic problems, both of which resulted in less demand for steel.Walter Energy also took a $1.1 billion write-down in the latter half of 2012, resulting in a net loss for the year.A stock analyst told Reuters that such write-downs were seen throughout the coal industry during the last year and were due to market conditions.

Reach Business Editor Patrick Rupinski at patrick.rupinski@tuscaloosanews.com or 205-722-0213.

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